December 13, 2006

 

Wednesday: China soybean futures settle lower; corn down on pft-taking

 

 

Soybean futures traded on the Dalian Commodity Exchange settled lower Wednesday on long liquidation, following overnight losses in Chicago Board of Trade soybean futures.

 

The benchmark May 2007 contract settled RMB23 lower at RMB2,836 a metric tonne, after trading between RMB2,824/tonne and RMB2,856/tonne.

 

Total trading volume fell to 70,410 lots from 101,182 lots Tuesday.

 

One lot is equivalent to 10 tonnes.

 

Analysts said more downside for soybeans is seen in the next few weeks, as possible losses in soymeal will weigh on soybeans, and further gains in corn will be difficult as current prices are already very high.

 

"Historically, prices will bottom in January. Besides, the market has got a bit crazy recently, and it needs a correction," said Li Honglei, an analyst at Nanhua Futures Co.

 

"Ample supply of soymeal on the spot market will drag down prices soon, thus pressuring soybean prices, especially if corn loses steam," Li said.

 

Soymeal futures settled lower on profit-taking by long position holders and fresh short positions.

 

The benchmark May 2007 soymeal contract fell RMB25 to settle at RMB2,308/tonne, after trading between RMB2,299/tonne and RMB2,325/tonne.

 

"Chart patterns also indicate more (soymeal) losses in the short term," said Zhang Yifan, a trader at China Grains & Oils Group Feed Corp.

 

Soyoil futures settled lower on long liquidation, along with other soy futures.

 

The benchmark May 2007 soyoil contract settled RMB46 lower at RMB6,716/tonne.

 

Dalian's corn futures also settled down, as strong gains in the past three days prompted some profit-taking by long position holders, analysts said.

 

The most active September 2007 contract settled RMB11 lower at RMB1,700/tonne, after trading between RMB1,690/tonne and RMB1,716/tonne.

 

Trading volume for all corn contracts rose to 1,064,926 lots from 1,470,588 lots Tuesday.

 

"Corn futures have stood at the level it achieved in late November again, and it may be difficult to make any breakthrough, given split market views on what will happen early next year," said Zhang.

 

"We're all optimistic about its long-term performance, but too many uncertainties lie ahead in the next six months," Zhang added.